Plexus Capital boosts its investment capacity by $400 million

Investment company Plexus Capital has an additional $400 million to invest after raising money for its fourth fund.

Plexus, a privately held company whose two offices are in Raleigh and Charlotte, announced Monday that it has raised $250 million in new funding from a group of investors that includes 57 banks, 208 affluent individuals and family offices – that is, businesses that manage money for wealthy families – and 8 institutional investors.

In addition, as a Small Business Investment Company, the funding it raised from investors entitles the company to borrow $150 million – the maximum amount available – from the federal Small Business Administration at attractive rates. That boosted the total capital available for the new fund to $400 million.

“We’ve built a great team,” said Michael Painter, Plexus’s managing partner. “We’re building a business that will be around for lots of years to come.”

Plexus’s third fund totaled $300 million, with $150 million of that total raised from investors.

Painter said the company’s strong track record was a key to its latest fund-raising efforts.

The company reports that its first fund, an $80 million fund that dates back to 2005, produced a 10.5 percent net annualized return to investors. The $175 million second fund formed in 2009 has generated a 19.6 percent net annualized return to investors thus far.

About 90 investors in the latest fund previously invested in a Plexus fund, Painter said. In addition, the company’s seven owners and other Plexus employees have invested a total of about $7 million of their own money in the new fund.

Plexus has invested $562 million in 77 companies to date from all its funds. The company’s five co-founders previously worked at RBC Centura Bank, including Kel Landis, a former CEO of RBC Centura.

In 2013, the SBA named Plexus the Small Business Investment Company of the Year.

Since its inception Plexus has invested $77 million in 14 companies based in North Carolina, more than it has invested in any other state, Painter said.

Plexus invests in profitable businesses that generate annual revenue ranging from $10 million to $100 million. Those investments typically include a loan plus warrants for a small equity stake in the business.

“We are a really good source of capital for small business that a lot of small businesses don’t know about,” Painter said.